By Rory Gallivan
LONDON--Illustrated book publisher Quarto Group Inc. (QRT.LN)
Tuesday reported a fall in first-half profit and revenue following
the collapse of one of its U.S. distributors and weak sales of new
titles in traditional book stores.
The publisher of titles such as "1001 Movies You Must See Before
You Die" reported sales of $65.6 million for the half year ended
June 30, down from $72.2 million over the same period the previous
year. Pretax profit excluding the benefit of one-off benefits such
as property sales fell to $0.7 million from $1.7 million, but
Quarto kept its dividend at 3.35 pence (5.63 cents) and said it
expects to meet its expectations for the full year.
Revenue excluding disposals was down by 3% due to the collapse
of HDA, which used to distribute Quarto's books to the home
improvement store Lowe's Cos (LOW), and weaker sales to
books-focused stores.
Chief Executive Marcus Leaver said in an interview with Dow
Jones Newswires that Quarto reacted to HDA's collapse by
distributing books to Lowes itself and that there could be scope
for the company to do this in other parts of the business. He added
that while sales to book stores were disappointing, most Quarto
titles are sold in non-book stores such as Lowes.
Quarto's international co-editions division, which publishes
successful English language books in other languages, was a bright
spot, with sales rising to $12.6 million from $10.7 million. Quarto
recently launched a joint venture in Brazil and Mr. Leaver said the
company is exploring similar ventures in markets such as China and
the Middle East.
He added that trading is improving at the publisher's Australia
and New Zealand display marketing business which sells books in
workplaces, and that the company will consider selling the unit
when the turnaround is complete in order to focus on publishing.
Quarto would also consider acquisitions, but only small ones, he
added.
Shares at 1110 GMT, down 13 pence, or 8.3%, at 139 pence valuing
the company at GBP27.4 million.
Write to Rory Gallivan at rory.gallivan@wsj.com; Twitter:
@RoryGallivan
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